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Wednesday, July 10, 2013

What The Charities Act & Regulator WILL NOT Do

Today Minister Shatter announced plans to establish an Independent Charities Regulator to become operational in 2014. For everyone in the charity sector the implementation of the Charities Act 2009 is very welcome, and judging by the public comments on-line it is universally welcome.

However, there is clearly a misunderstanding of what the Charities Act contains. The 3 areas that seem to be focused on by the public are not necessarily areas that will be affected by the new regulator. The Charities Act:

Will NOT have an impact on charity CEO salaries

Will NOT have an impact on religious organisations getting tax relief

Will NOT get rid of street fundraisers (sometimes referred to as chuggers)

CEO Salaries
My understanding is the Charities Act has no say on what a charity CEO should be paid, although the act does touch on persons being paid reasonably and proportionately to the service they provide.

But charities will never be regulated on how they pay their staff, in the same way businesses aren't regulated on how much they pay their staff - because it wouldn't make any sense. Trustees/Directors will continue to decide what is appropriate to pay a CEO and their obligation/desire will continue to be getting the best possible staff at the lowest possible cost, operating in the best interests of the charity.

I know you don't want to hear this but it's still going to be up to you to determine who is worthy to donate to. If you don't like what a charity pays their CEO or they refuse to tell you then you can withhold that donation. But if you like what the charity is achieving and the impact they are having then their staff are probably doing a good job.

You can read more on my own thoughts on charity salaries in these posts:

While the Charities Act 2009 provides for certain minor changes to the requirements of cash and non-cash collections, it still specifically allows these (extremely effective) fundraising methods to continue. Thankfully an official permit system will continue on from the self-regulation of the IFFDR, and this should weed out some cowboys, but fundraisers will continue to interact with you on the street and knock on your door.

The onus will remain on the public to check if the fundraiser talking to you is legitimate and if the charity they are representing is really the best place to donate money. The charity register will make this easier, but you'll still have to do a bit of work to see if the specific charity is actually helping anyone.